An Evidence-Based Approach to Exclusive Dealing and Loyalty Discounts

Global Competition Policy, No. 1, July 2009

George Mason Law & Economics Research Paper No. 09-32

7 Pages Posted: 18 Jul 2009  

Joshua D. Wright

George Mason University - Antonin Scalia Law School, Faculty

Date Written: July 15, 2009

Abstract

At the recent Section 2 hearings focused on the antitrust analysis of exclusive dealing contracts, a sensible consensus view emerged that a necessary condition for anticompetitive harm in an exclusive dealing or de facto exclusive contract is that the contract deprives rivals of the opportunity to compete. These contracts, including market-share discounts and “loyalty discounts,” can harm competition when they deprive rivals of an entrenched firm from accessing distribution sufficient to achieve a minimum efficient scale. The recently-withdrawn Section 2 Report reflects this consensus. This article discusses the strengths and weaknesses of the Section 2 Report approach to exclusive dealing and loyalty discounts.

Keywords: antitrust, consumer, David Evans, entrant, entry, exclusion, free ride, Heide, monopolist, predation, retailers

JEL Classification: K21, L41, L42, L44

Suggested Citation

Wright, Joshua D., An Evidence-Based Approach to Exclusive Dealing and Loyalty Discounts (July 15, 2009). Global Competition Policy, No. 1, July 2009; George Mason Law & Economics Research Paper No. 09-32. Available at SSRN: https://ssrn.com/abstract=1434406

Joshua D. Wright (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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